Governments do not necessarily act in the national interest, especially when making detailed microeconomic interventions. Instead, they are influenced by interest group pressures. The kinds of interventions that new trade theory suggests can raise national income will typically raise the welfare of small, fortunate groups by large amounts, while imposing costs on larger, more diffuse groups.
Paul KrugmanSo what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment.
Paul KrugmanYou know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear weโre going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And itโs long past time for the GOPโs leaders to take a stand against the hate-mongers.
Paul KrugmanThe problem isn't that people don't understand how good things are. It's that they know, from personal experience, that things really aren't that good.
Paul Krugman